When should businesses increase prices to keep up with rising payroll costs?
When's the last time you updated your pricing model to match your payroll reality? For example, our direct payroll (before tax) is 38% while our indirect payroll is 10%. As of January 2, we increased rates for all recurring clients by 4% to offload the indirect percentage. Going forward, we increased all first-time services by 5%. Thoughts?
💡FEATURE REQUEST: Price Increases in Products & Services List
Do you increase prices for ongoing customers? Do you know how long it takes me to increase my prices for 700 ongoing clients in my cleaning business? Whether you increase your prices on an annual basis or just as needed in these unpredictable times, it would be easier to make these changes en masse in the Products and Services tab! How would it work? When editing a product or service line item in the Products & Services List, there should be an option to carry that modification over to any existing Jobs that have that line item on it. Currently, this would only update for new jobs created, but I'd love to see a little pop-up that says, "Would you like to change the price for existing Jobs with this line item? Yes/No" Use Case Example: Because I am in the cleaning industry, it will be my primary use case. Let's say you have a minimum price that every client's rate will be at or above. When you create a new job for a recurring customer, you add a line item titled "Minimum Rate + current year," like for 2020: "Minimum Rate 2020," which is $150. You also add another line item based on how your pricing model is set up - in this case, I will use a simple one: "Small House" for $10 "Medium House" for $30 "Large House" for $50 When it's time for your prices to increase, consider the following options: you could decide to raise prices only for people with large houses and keep your minimum rate the same, or you may want to increase the cost for clients who have been with you for more than 5 years. Instead of making this change one client at a time and trying to sort through who the change applies to, I could go to the Products and Services List and find the specific line item I want to modify. Then, I could edit the price in there! Ta Da! You've raised your prices! Why should Jobber care? This would be huge for any business industry that has recurring clients. ServiceTitan, Housecall Pro, and other competitors already have this feature. I have found other threads that mention something like this or frustrations with how to go about raising prices. This would allow businesses that only see customers once or twice a year to set up their customers as recurring with one Job, saving them a lot of time and effort as well. You'd have at least one very loyal customer in me! I've spoken to two support agents who thought this was a simple but fantastic idea! My next price increase is in June, and I'd love you guys if you saved me weeks worth of work in a single click 🤞🙏 QUESTIONS, COMMENTS, FEEDBACK, AND MORE USE CASES WELCOME!!“Your prices are probably too low.” 💸
Winning almost every job you quote? Gabe Chrismon (Oply) says that could be a sign you’re charging too little. More jobs can keep you busy, but the extra driving, paperwork, and labor can eat into what you actually take home. 💬 Comment below: Have you ever realized you were charging too little? How did you know, and did you raise your prices? In this Masters of Home Service episode, Gabe shares the hidden costs of taking on more jobs, how to test higher prices with new customers, and ways to explain an increase to longtime customers. Never miss an episode of Masters of Home Service. Subscribe on Apple, Spotify, or wherever you get your podcasts.
How do you calculate your baseline price before sending a quote out?
When you look at a job site, how are you actually building your estimates? Are you pricing based on true operational costs and target profit margins, or are you matching local competitors and hoping there is money left over at the end of the month? Knowing your numbers comes down to a few key questions: What is your true hourly overhead rate? (Total monthly fixed overhead divided by total monthly billable hours) Are you calculating margin or markup? (Markup on cost is not the same as gross profit margin. If you want a 30% margin, multiplying your costs by 1.30 leaves you short at 23%.) What is your minimum shop rate before pulling a rig out of the driveway? How are you handling this in your business?Are You Building a Business or Just Creating Yourself Another Job?
It’s easy as a small business owner to get caught up doing everything yourself. At what point do you start delegating, hiring, or putting systems in place so the business can operate without you being involved in every job? I’d love to hear how other owners are making that transition while still keeping quality and customer service high.Those who charge for inspections, do you have a flat rate or does it depend on the property?
I recently got a request for a rodent assessment for a house that is about 10,000 sqft, an absolute monster of a house with 6 levels, a 4 car garage (buddy has a McLaren 750S, Porsche 917, Ford GT and a Range Rover!!!), vehicle lifts, elevator, separate chef kitchen, indoor pool...the works! I told the homeowner my standard fee for a more modest sized house, and that I would have to triple that to be able to spend the time at their home and not feel rushed. They did agree and made no issue out of it but it did make me wonder how other people approach this. Then I found the issue areas and they were about 3-4 times as many as a regular house and the cost reflected that. More doors, vents, cracks, holes, utility lines...it was insane. Should I have kept the inspection charge the same knowing I would find many many more holes or was it smart to up the inspection charge?What’s Your Target Gross Margin vs. Actual Net Margin? Let’s Benchmark.
In home services and contracting, top-line revenue gets all the attention, but net profit pays the bills. Many trade operators aim for a 40–50% gross profit margin to retain a healthy 15–20% net margin, but actual figures vary significantly based on team size and trade complexity. A standard healthy benchmark breakdown often looks like: Cost of Goods Sold (Direct Labor + Materials): 50–60% of revenue Overhead & Operating Expenses: 25–30% of revenue Net Profit Target: 15–20% of revenue I’d love to benchmark with the community: Are you hitting your target net margins consistently as you scale, or is overhead creeping up faster than revenue? Where are you seeing the biggest pressure on your margins today?Should customers pay more if they refuse auto-pay?
Auto-pay saves a lot of admin time in a recurring service business. Manual billing sounds simple until invoices sit unpaid, cards fail, reminders pile up, and someone has to decide whether to pause service. That extra follow-up has a cost. I don’t think every customer who avoids auto-pay is a bad customer. Some people just prefer more control. But if one customer requires more billing work every month, should they pay the same price as someone on auto-pay? I’m starting to think manual billing fees make sense. Something simple like: “Auto-pay is included with monthly service. Manual invoice payment is available for an added admin fee.” Do you require auto-pay, charge more for manual billing, or let customers pay however they want?Service Agreement Ideas for Project Based Businesses
This one has got me racking my mind. One thing they always talk about when you are building enterprise value in a business is having predictable revenues. I think for something like window washing, lawn care, poop scooping etc it'd be easy to have predictable revenues because it's pretty straightforward to have a re-occuring service agreement. But what about us GCs? I originally thought I could get people with a membership for a percentage off jobs. This seemed like a good idea till the first two people to sign up only did so because they had large $40k plus jobs so it was a no brainer (it paid for itself 2x over). If I tried to make the percentage off smaller, it wouldn't be enticing enough to get people interested. Let's brainstorm here guys - what can a general contractor do as a monthly or quarterly service to get in to the service agreement game?
